Why this contrarian economist thinks inflation isn’t so bad
He sees it as more of a solution. And one that’s not so bad, given our other options.
He suggests that we need to go back and look at the conditions that ultimately led to the rise of inflation – namely, a severe recession caused by a global health crisis and temporary widespread economic shutdown – and consider what the policy response by governments and central banks was all about, and how we chose to pay for it.“I want to push back against this notion that we could have sailed through this crisis with no inflationary repercussions.
Now, governments could have decided to actually impose a new, higher tax – for some temporary period, say, maybe a couple of years – to facilitate this massive and necessary income redistribution. In the midst of a crisis and recession, that would not have been popular, or, perhaps, economically desirable.
“The net effect is essentially the same thing,” Prof. Andolfatto said. Costs go up for those earning incomes, to pay for supports for those in need. Only in this case, those increased costs are in the form of higher consumer prices instead of higher tax bills.This is a point that Conservative Leader Pierre Poilievre has been making for a long time – often referring to inflation as a “tax” brought on by excessive government spending and soaring deficits. But Mr.
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